Asbury Automotive Group Inc (ABG)

Financial leverage ratio

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Total assets US$ in thousands 10,159,400 8,255,000 8,165,900 8,182,800 8,021,400 7,816,300 7,638,800 7,860,100 8,002,600 3,571,400 3,524,900 3,582,300 3,676,300 3,530,600 2,934,400 3,069,200 2,911,300 2,816,500 2,814,000 2,904,900
Total stockholders’ equity US$ in thousands 3,244,100 3,248,500 3,068,600 3,049,200 2,903,500 2,642,900 2,410,400 2,182,500 2,115,500 1,301,300 1,148,300 998,000 905,500 811,900 713,100 660,900 646,300 600,000 556,300 504,600
Financial leverage ratio 3.13 2.54 2.66 2.68 2.76 2.96 3.17 3.60 3.78 2.74 3.07 3.59 4.06 4.35 4.11 4.64 4.50 4.69 5.06 5.76

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,159,400K ÷ $3,244,100K
= 3.13

The financial leverage ratio measures the extent to which a company relies on debt financing to support its operations and growth. A higher ratio indicates higher financial risk due to increased debt levels, while a lower ratio implies a lower reliance on debt funding.

Analyzing the financial leverage ratio of Asbury Automotive Group Inc over the past eight quarters reveals fluctuations in the company's leverage position. The ratio ranged from 2.54 to 3.60 during this period, indicating varying degrees of debt utilization.

In the most recent quarter, Q4 2023, the financial leverage ratio decreased to 3.13 from 2.54 in Q3 2023. This suggests that the company reduced its dependence on debt relative to its equity in the latest period, potentially improving its financial stability and risk profile.

While the company's leverage ratio has shown some volatility in recent quarters, it has generally trended downwards since Q1 2022, where it peaked at 3.60. This declining trend may imply that Asbury Automotive Group Inc is actively managing its debt levels to achieve a more balanced capital structure and mitigate financial risks.

Overall, monitoring the financial leverage ratio over time provides valuable insights into Asbury Automotive Group Inc's capital structure decisions and financial risk management strategies. Investors and stakeholders can use this information to assess the company's ability to meet its financial obligations and navigate potential economic challenges.